The PB's measures against price increases categorically cannot produce any effect immediately. That is certain! At the very least, when the bills are read, one can see what deadlines are given.
This is what Vanya Grigorova - an independent municipal councilor in the Sofia Municipal Council, economic expert and former trade unionist - told BNR:
"In order for there to be immediate action, there must be a ceiling on the price, or on the mark-ups. Of course, the easiest way to do this would be through the price, at least for consumers, because this means that some frameworks are immediately set within which traders can work. What we are seeing right now is an attempt to combat market defects, remaining within the framework of market mechanisms. This is so as not to anger business, but I fear that this will anger consumers".
"Fair price" is not a ceiling on either price or markup, Grigorova recalled.
"No matter how it is calculated, it will be recommended. We have many recommendations, that is, it will not in any way automatically determine prices administratively or regulatoryly. It is a wish, but essentially we have a similar wish at the moment - there is a website maintained by the Consumer Protection Commission. "How much does it cost", I think it was said, where you can see the prices of large traders. In essence, this is again some kind of guideline for consumers as to what frameworks it is normal for prices to move within. Whether it is fair is another question."
Grigorova expected from the PB "slightly more radical actions", but even in the election campaign it became clear "that they will not leave the paradigm in which we live" and will try in some way to "recover" the damage that the market causes, but according to her "correcting market defects through market mechanisms is a bit pointless":
"I am not saying that these texts should not be adopted. On the contrary, I can list numerous advantages that these mechanisms included in the two bills provide, but they are very palliative at the moment and, moreover, are longer-term than we would like. The fastest and most effective would be to impose a price ceiling - something that I no longer expect from the PB".
In order to have real effects, there needs to be intervention in the pricing chain between the manufacturer and the retailer, which the PB is doing with the Law on Amendments to the Law on Protection of Competition, Grigorova is categorical.
"But the other thing they are missing is the increase between the retailer and the end consumer, where the speculation actually is. One is unfair competitive practices - between the manufacturer and the retailer. And the speculation is between the retailer and the end customer".
Regulators work as far as the laws allow them, Grigorova pointed out.
"If the law does not state that this is illegal and that sanctions follow from this, the regulator cannot do anything". Bulgarian business is already betting its plans on the sanctions it will pay, that is, the sanctions are not of a deterrent size, she said. According to her, the most serious existing mechanism is the possibility of a company being sanctioned for unfair competition with 10% of its turnover for the previous year.
"On the other hand, all other sanctions should also be very seriously increased. I see in the bill that it is written that if a company is sanctioned twice within 2 years, this is considered a systematic violation and the sanction will be doubled. However, for a company that has a turnover of 10 million leva, a sanction of 2,500 or 25,000 will not deter them. They will simply bet an additional €50,000 in their business plan and continue with the same practices. Just a bigger penalty.
Imagine getting on public transport and being told: "If we catch you without a ticket, you will pay twice the price. Will the threat deter you?! There is no constant control there. Maybe once in 10 times you get on public transport, you will be checked – something similar happens with regulators and low penalties".
Grigorova abstained from voting on the construction of the 70-meter-high building in "Mladost". She explained about it:
"The problem is that those in power do not imagine a different form of government than what has been carried out so far, in the last few decades. I abstained because the draft report stated that the compensation for the municipality would be 26%... My colleague Diana Tonova proposed and I supported the increase from 26 to 30% - the area that the municipality and "Sofia Properties" will receive should be larger than the built-up area. But generally I am not inclined, when a private individual, an owner, owns 7 or 8% of the land, and everything else is municipal, then the right to build should be given to the private individual. Not only that! Subsequently, it is also planned to give him the land. That is, in the beginning it is "right to build", only, and then it is planned that the land will become his property.
The better option is for the municipality to build a building there that will be used by the municipality. "Mladost" has no municipal housing, Sofia has no municipal housing. If we think that there should be a residential building there, why is the municipality not building housing there, but giving it to a private individual who owns only 7-8%?
What the colleagues from "Save Sofia" said was very key - a few years ago the land was 100% municipal property. The municipality has made every effort to start buying up the parts of the individual smaller owners, so as to consolidate the land and make something municipal. Unfortunately, we see that now we are going in the opposite direction.